Demand remains stable15 September 2003
Prices across most selections remained stable in July with heavy native heifers increasing slightly. Prices began picking up slightly into mid-August although summer holidays mean that demand is limited. Although purchases from tanners are not spectacular, most packers have been able to shift production fairly easily. Chinese, Korean and Japanese buyers have re-entered the market following SARS and even low grades have been reported to have been sold. Some overcapacity in the split market, especially in Asia, has meant a quieter market. Prices have been helped to remain stable by higher US cattle slaughter during the summer months. In the US, there were mixed fortunes for the industry. It is anticipated that the ban on imports of live cattle into the US from Canada will continue for the foreseeable future. This will have an impact on some US packers. IBP's parent company, Tyson Foods, announced that their Lakeside plant in Brooks, Alta, experienced losses due to the BSE problems in Canada and slaughter was down 34% in Q2. On the other hand, there have been more encouraging results from a number of footwear companies. Names such as Adidas, Foot Locker and the Payless Shoe Source all posted positive sales for the last quarter. It is worth noting, however, that Adidas sales increases were higher in Europe and actually fell in North America. This was all good news for the footwear sector which got together for an exhibition in Las Vegas at the beginning of last month. The US retail sector may not be booming but it does appear to have turned the corner. Wolverine World Wide Inc have also announced that they have made a cash offer for the Sebago brand. It is anticipated that Wolverine, who also own the Hush Puppies, Harley-Davidson, Caterpillar and Merrell brands, hope to complete the deal in October. Total raw hides sold for export in the four-week period ending August 7 reached an average of 728,500. This compared with a mean of 707,500 over the same period in the previous year, an increase of 2.9%. As usual, South Korea was the largest purchaser of US raw salted hides and took 567,800 over the same four-week duration. Following Korea, other significant buyers were China (376,600), Hong Kong (173,000), Japan (158,600), Taiwan (111,600), Mexico (108,600), Thailand (58,100) and Italy with 9,700 hides. Despite South Korea being the largest buyer of raw hides, the spending power of China, Taiwan and Hong Kong together shows that it is really Chinese tanners that are the largest volume purchasers of US hides. Combining the three gives a figure of 661,200 hides sold into the Chinese market. Wet-blue sales averaged 74,500 pieces over the same period with 92,200 sold during the week ending July 13. Most blue hides were sold to Asian markets with Hong Kong, China, South Korea and Taiwan all taking major volumes. Outside Asia, Mexican and Italian tanners took reasonable wet-blue amounts. In addition to the wet-blue sales, Italian tanners also bought 32,300 and 21,000 chrome tanned calf and kip skins during two weeks in the middle and end of July. Volumes of wet-blue split sales varied throughout July and peaked in the week ending July 20 with sales of 3,688,000lb. Hong Kong took almost half with 1,688,000lb and Italy took 1,000,000lb. Another major split buyers was Taiwan.